Is Early Retirement Really a Good Solution? Experts Have Doubts

Politicians from the ruling coalition have announced that the statutory retirement age will not be raised in Poland. In turn, experts point out that in order to encourage people over 60 (women) and over 65 (men) to continue working, other forms of support are necessary. According to Agnieszka Łukawska, an expert from the Pension Institute, extending professional activity may contribute to increasing the amount of pensions. However, this cannot be achieved by coercion; it is better to look for solutions that will encourage people to remain on the labor market. Currently, seniors who work can benefit from various forms of support, such as income tax exemption. However, as Łukawska notes, it is also necessary to provide appropriate training and access to health care.

There are currently an average of 1.8 working people per retiree, but the situation varies depending on the region of Poland. In the Mazowieckie and Pomorskie provinces, this ratio is 2.3, while in the Świętokrzyskie province it is only 1.6. With the declining birth rate in Poland, the forecasts for the future are not optimistic. In 20-30 years, the number of working people per retiree may fall to around 1.3-1.4, which puts the pension system in a difficult situation.

The attempt to gradually raise the retirement age to 67 for both sexes in 2013 was met with great social resistance and was one of the reasons for the electoral defeat of the Civic Platform in 2015. Currently, since October 1, 2017, the previous thresholds are in force again, and the social reluctance to raise the retirement age seems to permanently block the possibility of changes in this matter. Despite this, experts emphasize that it is necessary for Poles to work longer, especially due to the amount of future pension benefits.

Experts predict that people currently aged 25-30 may receive pensions of only about 25% of their last salary. Therefore, extending the period of professional activity may be one of the solutions to increase the amount of benefits. However, as Łukawska points out, it is crucial to introduce incentives to stay longer in the labor market, and not to force this on employees.

Łukawska emphasizes that a broad senior policy is necessary, which not only promotes longer professional activity, but also provides appropriate health conditions and opportunities for professional development for seniors. People on the labor market must have the opportunity to improve their qualifications in order to adapt to changing conditions. This is particularly important because the professions that exist today may disappear in 10-30 years, and new ones will appear in their place. Łukawska also emphasizes that working longer allows for the accumulation of greater retirement capital for a shorter period of receiving benefits. Seniors who give up receiving a pension and continue working can benefit from tax relief, such as the PIT exemption for seniors up to the amount of approximately PLN 85.5 thousand. However, as ZUS data show, the average retirement age in 2021 was 65.2 years for men and 60.6 years for women, which means that the effective retirement age only slightly exceeds the statutory one.

Łukawska reminds us that retirement at statutory age does not mean high benefits. People counting on a comfortable life from retirement must expect to find additional sources of income. One solution is alternative forms of saving for retirement, such as IKE, IKZE, PPE, PPK, as well as individual saving and investing.

On the other hand, new employees entering the labor market are not only fewer in number, but also often delay the start of their careers due to long-term education, the effectiveness of which is not always in line with the requirements of the labor market.

Łukawska notes that it is worth rethinking the educational policy in Poland. Currently, many young people decide to study, which delays their entry into the job market. It is worth considering whether promoting higher education among everyone is really necessary.